Tamar European Share Discussion Threads

[skyship] 31/8/2010 08:13

Well that was disappointing to say the least. Divi deferred pending refinancing outcome and LTV still at 58%. Refinancing negotiations continue and may require a multiple of lenders - if they can be found. Will certainly require more property sales,

So, hope deferred. Will certainly hold as the underlying assets are there in abundance, so given a reasonable outcome in/before October, an improved share price will follow......

[bisiboy] 28/8/2010 13:26

i have my eye on these may switch out of alph.
went in for a quick 10% and just about have it.

[skyship] 27/8/2010 18:08

Affc - Happy Hols - where are you headed? If SW France we must meet up...

Alan - welcome aboard - hopefully this will pay off on Tuesday. Will be emailing you tomorrow..

[affc21] 27/8/2010 17:44

As I have previously mentioned, I will not be around unfortunately for the results due to holiday commitments, but will update this BB header upon my return.

Still hoping to be able to use my mobile phone for the results, so should not be totally out of the picture (so to speak).

Good luck all, for Tuesday.

[alanji] 27/8/2010 13:48

I'm convinced and used the remainder of my Sipp cash to buy back in at 30.9, but the accounts are still a nightmare to interpret - one of the reasons I sold as KEIF. Tempted to switch more from IFD but will probably await Tuesdays rns.

[skyship] 27/8/2010 08:41

Last day to trade TEIF ahead of next Tuesday's numbers....

[affc21] 21/8/2010 21:45

From KnightFrank

Logistics and industrial market overview:

The development of Europe's logistics
and industrial property markets is closely
tied to trends in manufacturing and retail
activity across the continent. Location is of
key importance to logistics occupiers, and
demand is mainly focused on properties that
provide access to transport links enabling
the distribution of goods across Europe and
beyond.

The heartland of Europe's logistics market is
the area in and around the Benelux region,
stretching into north east France and the
Rhine-Ruhr region of Germany. The Benelux
region includes major transport hubs
including Amsterdam's Schiphol airport and
the seaports of Rotterdam and Antwerp, and
is an important gateway to the rest of Europe.


Download this document, and goto page 3, you will see the European logistics map





The common factor here is that TEIF have approx 57% of the property assets within these countries (see the European logistics map), with the rest within the Nordic region (one of the top performing property investment regions of late).



Property assets as at 31 March 2010 (from Factsheet):

France £99,572,000 (33.53% of portfolio)

Norway £69,645,000 (23.45% of portfolio)

Belgium £39,776,000 (13.40% of portfolio)

Sweden £33,486,000 (11.28% of portfolio)

Germany £24,107,000 (8.12% of portfolio)

Finland £22,362,000 (7.53% of portfolio)

Netherlands £7,993,000 (2.69% of portfolio)

Total £296,941,000 (100% of portfolio)

Note: The above values/percentages will have changed slightly since the publication of the Factsheet due to the property sales since.

[affc21] 21/8/2010 19:32

SKYSHIP - a very thoughtful analyses, nice one.
Two slightly different investment reasonings for investing in TEIF, both of which are based on a very sound investment case (in my view at least, or I would not be invested here).

Refinancing (as you yourself alluded to) will be the clincher here, which will lessen the investment risk substantially (for those less risk averse investors) and hopefully an increase of the dividend (more attractive to income investors).
Happy with 5% a dividend as it stands at the moment, but would be pleased with any increase (will be happier still if the dividend is increased by some 50% to give a yield of 7.5%, or more, should the refinancing be completed on competitive market terms).


I also added to my ISA this last week, was hoping for less than 30p, but in the end topped up at slightly more - not by much more though :)



The bad news is I will be on holiday (not such a bad deal really) all of the bank holiday week and results will be released on the Tuesday, so will have to rely on my mobile phone (not the best media, for reading any news).

[affc21] 21/8/2010 10:58

Countdown to results, with only 5 more trading days to go.

Well its pretty obvious where my money (investment) is, probably a bit of a give away from my previous postings.

Good luck to all posters/investors on this board.

[affc21] 20/8/2010 19:08

A brief summary,regarding TEIF property assets.


TEIF Country Spread by Portfolio Value, which is focused on investments in industrial real estate assets primarily across Western and Northern European jurisdictions (from Factsheet to 31 March 2010):


France £99,572,000 (33.53% of portfolio)

Norway £69,645,000 (23.45% of portfolio)

Belgium £39,776,000 (13.40% of portfolio)

Sweden £33,486,000 (11.28% of portfolio)

Germany £24,107,000 (8.12% of portfolio)

Finland £22,362,000 (7.53% of portfolio)

Netherlands £7,993,000 (2.69% of portfolio)

Total £296,941,000 (100% of portfolio)


The above values/percentages will have changed slightly since the publication of the Factsheet due to the property sales since - see below (also due to £/EUR exchange rate movements).


They have since managed to raise:

EUR1,000,000 via a property sale in Boxmeer, Holland (26 Jul 2010).

£3,452,750 (SEK 38,000,000) via a property sale in Gothenburg, Sweden (01 Jun 2010).

EUR20,700,000 via property sales in Helsinki and Tampere, Finland (20 Apr 2010).

EUR7,450,000 via property sales in Paris region, France (16 Apr 2010).

-----------------------------------------------------------------
Financing
As at 31 March 2010, the Fund had debt levels representing gearing, on
total property value of 65.5%. If all cash balances within the Fund were
to be applied to reduce the drawn debt facilities it would reduce gearing
to 59.6%.

So with the above property sales, the LTV ratio upon refincing will be further reduced.

------------------------------------------------------------------

Since April 2009, the NAV has been on the increase, due to the industrial real estate assets being in locations primarily across Western and Northern Europe.

Company Performance Overview:

The Company's Net Asset Value ("NAV") at 30 September 2009,
Adjusted to add back deferred tax, was 79.2 pence per share.
This represents an increase of 5.3% over the equivalent NAV at
3 0 June 2009.

(and then)

The Company's Net Asset Value ('NAV') at 31 March 2010, adjusted to
add back deferred tax, was 80.9 pence per share. This represents an
increase of 1.4% over the equivalent NAV at 31 December 2009.

------------------------------------------------------------------

Personally I am expecting a small rise (or at least a stabilisation) in the estate assets on a local basis (EURO only). But due to the £ rising by approx 7% in relation to the EURO exchange rate since the date of the last Factsheet publication (80.9p NAV adjusted), the resulting NAV will be impacted downwards (my guesstimate approx 69p NAV adjusted).

With the present share price at 32p to buy, there is some 115% room in the share price to catch-up with the NAV (if the resulting adjusted NAV comes in at 69p).

The discount to NAV would be an attractive 55%. (if the resulting adjusted NAV comes in at 69p).


Hoping they will have some news on the financing (which could be the reason for the recent drop in share price as well as some nervousness towards the Eurozone and the Euro), with which we should get a responce in kind with the share price.

Refinancing due dates are (taken from my notes, but not checked as of late, so may not be accurate now, although I am not aware of any alterations to the terms)): October 2010 (£51m). April 2011 (£58.5m (=£37m+£21.5m)). November 2011 (£89m).


Tamar European Industrial Fund Ltd will announce its half year results for the period ended 30 June 2010 on Tuesday 31 August 2010 (with an adjusted NAV to 30 June 2010).


Just my thoughts.

Please DYOR and bear in mind the variation in the exchange rate, which has an impact (increase/decrease) on the NAV.


Thoughts anyone...

Edit:
And with an approx 5% (1.5p) annual dividend at a 31p (mid) share price.
Which could be substantially increased upon a successful refinancing, as suggested by some very knowlegdable posters on these boards.

[affc21] 19/8/2010 18:40

Tamar European Industrial Fund

Announcement of Half Year Results


Tamar European Industrial Fund Ltd will announce its half year results for the
period ended 30 June 2010 on Tuesday 31 August 2010.

[affc21] 17/8/2010 20:00

Market expresses confidence in Western European Logistics sector

London, 20 July 2010 – Two-thirds of the leading players in Europe's industrial and logistics property sector identified Western Europe as the most attractive region for logistics investment over the next three years, according to a new survey by CB Richard Ellis (CBRE). The findings emerged at CBRE's recent European Industrial and Logistics conference 'Unlocking the Power of Three', which was attended by more than 80 investors, developers and occupiers in the sector.

[affc21] 17/8/2010 17:39

SKYSHIP - Have done as requested. Was on my to do list, just not had time lately, so Thanks for the reminder.

Looking forwards to the results (end of month) and hoping they will have some news on the financing (which could be the reason for the recent drop in share price as well as some nervousness towards the Eurozone and the Euro), with which we should get a responce in kind with the share price.

Refinancing due dates are (taken from my notes, but not checked as of late, so may not be accurate now, although I am not aware of any alterations to the terms)): October 2010 (£51m). April 2011 (£58.5m (=£37m+£21.5m)). November 2011 (£89m).

[skyship] 17/8/2010 16:00

affc21 - you need to relace the old Investegate/KEIF link in the header with this one:

[skyship] 09/8/2010 12:23

We should soon be getting the announcement of the date for the Interims...

(Last yr announced on the 6th for the results on the 28th)

[skyship] 09/8/2010 10:28

scburbs - thnx for that, though to be quite honest I'm still not sure whether in practical terms this is just an irrelevant accounting principle.

Still, even using the reduced 54p the NAV discount is an attractive 40%. Just now need to assess what annual dividend we might be anticipating....

Thoughts anyone?

[scburbs] 07/8/2010 19:29

Skyship,

The deferred tax issue is critical to valuation.

Let's say TEIF buys a property worth 100 in a corporate form. The property has a tax base cost of 50. Due to the deferred tax liability (i.e. the tax liability of 15 assuming 30% tax rate that would arise if the property was sold, rather than the company) TEIF negotiates a discount and pays 95.

If TEIF provided for the deferred tax in full then the 95 that they have paid would immediately be reduced to 85 and they would have realised an instant loss of 10. This would be misleading as they have acquired the company at its value in the market at that point. In order to avoid this issue, only deferred tax which arises after the acquisition is provided for in full.

In practice TEIF will be looking to exit via a corporate sale and, therefore, they will be expecting to never suffer this tax. TEIF is adjusting its valuations on the assumption that a purchaser will seek the same discount that TEIF itself sought on the original acquisition. However, if a purchaser was to seek a larger discount than TEIF got on acquisition then there would be a risk of part of the unprovided deferred tax liability being triggered.

Therefore, it is fair to say that the quoted NAV number is appropriate, but it is useful to keep an eye on the other one as if the practice changes as to how much of a discount that a purchaser will seek for the deferred tax liability then part of this unprovided deferred tax liability may ultimately be suffered.

[westcountryboy] 07/8/2010 15:17

Mentioned today in FT (as an exception in a generally downbeat article):

[flying pig] 07/8/2010 09:09

Is asset value the key factor or should we be looking at the value of the long term dividend stream?

If the asset value were say £1.00 but there were no prospect of dividends would you want to buy - even at 30p? Small shareholders remain vulnerable to rape and pillage as in the TAP takeover. NB The ability of management to pay fees to themselves to reduce shareholder rewards is large.

[skyship] 06/8/2010 16:53

What do we feel about the deferred tax issue? There's a very large chunk here. Shouldn't we really base our NAV calcs on the true net figure - as per below:

"After deducting all deferred tax, whether recognised on the balance sheet or
not, NAV at 31 March 2010 was 54.4 pence per share (53.7 pence at 31 December
2010)."

[flying pig] 06/8/2010 16:20

I entirely agree refinance should not be a problem. Decent property portfolios can be funded. The problems arise where the loan to value ratio is less than conservative.

For anybody with SIPPs or ISAs there are considerable attractions in shares such as these!

[skyship] 06/8/2010 16:08

interesting - thnx Nick

EDIT: esp. since Euribor 12month currently is a mere 1.428%

[nickcduk] 06/8/2010 16:04

I would expect them to get new borrowings at around 150-200bp above 3 month Euribor. This will be more expensive than previously but as the swaps come off their overall cost of borrowing should fall very sharply. Their LTV is well within range for them to have numerous parties willing to lend on terms similar to above.